I laughed when a close friend related her conversation with a fellow manager in her company. The manager works in a US multinational so salary not much of an issue to buy a property. The manager said, he does need to buy a property, preferring to rent because when he needs to move back to his hometown, he can stay at his father’s home. While I advocate that everyone should at least own the property which he stays in, but after looking at this particular circumstance, perhaps there are a few reasons why the manager chose not to buy a property.
He was renting a flat, whole flat for just RM600. With that price I think it’s furnished. If he uses that flat as a benchmark, then he may feel not much different whether he buys or rent because the flat price in Penang does not move much anyway. If the property price does not increase much and the property is a low priced one, when you factor in the maintenance, the lawyer’s fee, the time spent etc, I do think it may be worthwhile to just rent. Note that this is particularly true for only this particular case.
He has also the mindset that he would like to move back to his hometown, thus perhaps he may be saving a lot of money for whatever reasons may be in his mind. When one has a very strong mindset that he should go back to hometown, it is not likely that he may want to own a piece of property in a place he calls as just a working place.
I believe also that he has never viewed any property to his liking because he may come from a smaller town where the landed properties are much cheaper than even the condos in Penang. The fact is, until today I have friends who said, it is crazy to pay RM500,000 or higher for a condo of which the land may be shared by hundreds of other units! Yes, even a lot of Penangites who has yet to buy a property still say the prices would crash soon because how can a condo be priced at RM700,000!
The world is a very strange place. One man’s meat is another’s poison. Come to think of it, if everyone in the world love to own a property, it is also not advisable because it may make the property price so expensive that even I may not have been able to buy one.My advice to people who really feel very strongly that they would love to rent, I think you should continue. No losses likely though the potential capital appreciation that you may enjoy is now nil as well.
written on 2nd jan 2014
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